Heating & energy
Heating options
Introduction
Our survey finds the cheapest way to heat your home.
We've compared the running costs and environmental impact of heating your home with a number of different fuels. And for the first time we've also compared the costs of heating your water.
Note: this report is a guide only and does not contain test results.
Energy sources
Woodburners head off heat pumps as the cheapest form of heating; unflued LPG heaters are the most expensive. Natural gas is the cheapest form of central heating – just ahead of pellet burners.
Firewood
A woodburner is still the cheapest way to heat your home – especially if you can get free firewood. We’ve used prices for pine firewood in our Fuel prices compared table as it was the cheapest and most widely available type in our January survey of firewood prices.
We haven’t calculated the cost of burning wood in an open fire. Open fires are inefficient (heat is lost up the chimney) and cause massive pollution for the heat they do produce.
Tip: Buy early – during spring or early summer – and phone around for prices. We found some good deals in our firewood survey.
How clean?
Along with wind and hydro, wood is one of the few sustainable carbon-neutral home-heating options. But to get the most heat (and the least pollution), it must be burned hot and in a specially designed firebox. The firewood must also be dry and the pieces not too big (less than 11cm in diameter).
Some woodburners can be used to heat wetbacks but this reduces their efficiency and may also overheat the water.
More information
Wood pellets
Wood pellets are used in pellet burners and also in boilers for central heating.
Pellet burners cost more to run than woodburners but they have their advantages. They produce less atmospheric pollution and the pellets are carbon neutral because they’re made from waste wood (compressed sawdust and wood shavings).
Pellet-fired central heating has a clear environmental advantage over other types of central heating fuel – it uses a renewable resource.
Tip: Our price checks in Auckland and Wellington found big variations, so phone around. In Christchurch wood-pellet prices were much lower and varied less. Make sure you’re comparing like with like – the pellets are sold in 15 kg or 20 kg bags. If you’re close to a pellet mill and can buy in bulk, you’ll be able to get a lower price.
More information
Electricity
Heat pumps are one of the cheapest heating options to run. They can be retrofitted – but they must be the right capacity for the house and they must be installed properly.
Discounted night rates make nightstore heaters and underfloor heating comparatively cheap, although you will need a separate meter (which would be an extra cost).
Portable heaters are the most expensive form of electrical heating. For modern well-insulated homes we recommend convection or oil-column models because the warmth is likely to circulate. For poorly insulated older houses with high ceilings, radiant heaters are likely to be more effective – you can feel their heat more directly. However, they shouldn’t be used in bedrooms or around young children.
Our cost calculations for electricity come from our PowerSwitch website – there was a big difference between the highest and lowest prices for each type of heating.
How clean?
Our electricity comes from a combination of renewable (wind, hydro and geothermal) and non-renewable (gas and coal) sources - so it's only a semi-clean fuel. But in your home, nothing is cleaner. Despite the inexorable rise in the price of electricity, electric heating provides a clean and easy way to heat your home.
More information
- Compare electricity prices on Consumer Powerswitch
- Choosing an electric heater
- Convection heaters
- Heat pumps
Natural gas
It’s cheaper to run your flued heater or central heating on natural gas rather than LPG. Unfortunately, reticulated (piped) natural gas is available only in the North Island.
Prices for natural gas can fluctuate, as they do for LPG and diesel. They’re world commodities and subject to rapid price changes that are out of the householder’s control.
Our cost calculations for natural gas come from our PowerSwitch website.
Tip: “Dual fuel” discounts for buying gas and electricity from the same provider are generally cheaper than paying for gas alone.
How clean?
Natural gas is clean-burning for pollutants, but it's a fossil fuel. Burning it adds the greenhouse gas carbon dioxide to the environment.
More information
LPG
Prices for the 45kg cylinders of LPG delivered to your door include the cost of delivery, so people in rural areas pay more for their gas. As well there’s a rental charge. Flued heaters and central heating that use LPG cost more to run than natural gas heating.
Running an unflued heater on 9kg bottles is the most expensive way of using LPG. It also presents a health and safety hazard. Unflued gas heaters create condensation and produce CO2. If a fault develops the heater may emit carbon monoxide (a poisonous gas). This can build up in a room and pose a significant health risk to children, pregnant women, elderly people and those with asthma or heart disease. High levels can be fatal to anyone. For this reason an unflued heater should only be used in rooms with good ventilation and should never be used in bedrooms.
Tip: We collected prices for “swappa” 9kg bottles – you pay for the first bottle you use but after that you simply swap your empty bottle for a full one. This means you don’t have the expense of having your bottle checked every 10 years as required by law.
How clean?
Like natural gas, LPG is clean-burning but adds carbon dioxide to the environment.
More information
Diesel
Diesel boilers heat water for use in water-filled radiators or under-floor heating.
Running your central heating on diesel is cheaper than using LPG – so in the South Island, where LPG is the only gas available, diesel is the better option for central heating.
However, diesel is more expensive than (reticulated) natural gas. So in the North Island, natural gas is the cheaper option.
When we surveyed in February 2011 diesel prices had risen by 23 percent over the past year. Since then they have spiked even higher – this has added an extra cent per kilowatt hour to their running cost.
How clean?
Now that we have low-sulphur diesel fuel, it's relatively clean in terms of pollutants. But it does come from non-sustainable fossil fuel and adds to carbon dioxide emissions.
The sun
It's free, and the most environmentally-friendly home heating option available. You'll need large north-facing windows to allow the sun to shine in during the day, a large thermal mass such as a concrete floor to store the heat, and insulation so the heat isn't lost too quickly at night. And you'll probably still need other heat sources for the coldest days.
If you're designing a new home, incorporating some passive solar heating into the design may not cost very much at all. It may also be possible to include some solar features when you're renovating, but it's harder.
More information
Fuel prices compared
Guide to the table
Costs are calculated on the basis of providing one kilowatt of heat for one hour. Firewood costs are based on our January 2011 survey of prices for pine. Electricity and natural gas costs are from PowerSwitch. Other costs are from pricing data collected during February 2011. GST is included.
Heating a room
There are several options to heat a single room.
Electric heating
The simplest option is often electric heating. This is the best choice if you only need to heat a single person, say if you find yourself getting a bit chilly sitting at the computer, or watching telly. There are two suitable types. A radiant heater has an element that gets red hot and will "shine" heat onto you, or a small fan heater will blow warm air at you.
For more widespread heating, we recommend oil column heaters, particularly for children's bedrooms, as they're silent and the surface temperature of the heater is not dangerously hot. You could also consider other convection heaters such as a panel heater, or fan heaters. A fan heater, although noisy, does have the advantage of moving warm air around the room to keep the temperature even.
For more information, see our guide to choosing an electric heater. To work out what size (capacity) electric heater you will need for a certain size room, see our interactive calculator - What size heater do you need?
A more energy-efficient option is a heat pump. These can be small enough to heat just one room or large enough to heat a big open plan area. They are moderately expensive to buy and install but have low running costs. You can use the thermostat to set the temperature exactly where you want it. And in summer they can be used for cooling.
Another option is radiant ceiling panels. The most common type consists of a heating foil which is installed between the framing and the ceiling plasterboard. To prevent the ceiling plasterboard from overheating and possibly cracking, a special thermostat with an additional sensor buried in the ceiling should be fitted.
Ceiling heating provides very pleasant and fast-acting warmth. Retro-fitting to an existing house is mostly possible, but expensive.
Gas heating
Gas options include flued or unflued natural gas or LPG models. We don't recommend unflued gas heaters, as they release water vapour and potentially-harmful exhaust gases into your home (see our March 2009 news item for more on this).
We prefer gas heaters to be fixed to the wall, and we recommend you use the type that has the flame totally enclosed. That way the heater can't tip over and there is no naked flame to create a fire hazard.
Heating the whole house
If you want a system that will heat the entire house, one thing to factor in is that not all parts of the house have to be at the same temperature. So, bedrooms, kitchens and bathrooms can be kept at a lower temperature than living areas such as lounges and studies. Ideally, any home heating system should be set up with at least two individually-adjustable temperature zones.
There are two broad approaches to heating a home: heat the air in the home, or heat the contents of the home (including the people). Generally, heating the home and its contents will give less condensation and a less stuffy feel than heating the air alone. The most effective way to heat the contents of a home is to warm the floor. The next most effective way is to warm the ceiling.
Underfloor heating
Underfloor heating is most easily achieved when a home is being built, but retro-fitting can be done in some cases. The most flexible method is to bury hot water pipes in an insulated concrete foundation slab. The water can be heated using gas, a diesel boiler, solar panels or a heat pump.
A popular variation is under-tile heating. Here, electric cables are laid between the existing floor and ceramic tiles. This method is useful anywhere tile floors are laid, including existing homes. To keep running costs down, a thermostat with an additional sensor buried in the tile floor is desirable.
Underfloor heating has one potential disadvantage. If a fault develops with the water piping or electric cable, it's a major problem to fix. Use the best components available.
Ducted central heating
Another option for the whole house is ducted central heating. A gas or diesel central heating unit, or a heat pump, is mounted under the floor, in the attic space or outside the house, and warm air is ducted to the various rooms. These systems can be set up with multi-zone controllers that allow some rooms to be kept at a higher temperature than others, and different temperatures at different times of the day. An advantage of ducted systems is the heating unit is not in the living space – only the duct grilles are visible in the rooms.
Woodburners and pellet burners
Modern, high-output woodburners and pellet burners can heat an open-plan house well. While they're generally less suitable for older style homes with separate, smaller rooms, there are a couple of ways you can set them up to heat a whole house. One is to buy a wet-back heat exchanger for the fire. This can be connected to water-filled radiators in other parts of the house. While effective, it is expensive.
Much cheaper is a ducted heat transfer system that pumps hot air from the room where the woodburner or pellet burner is, to cooler parts of the house.
Use a heating engineer
We strongly recommend you use an experienced heating engineer if you're thinking of getting a heating system for your whole house. Ask how long they have been in business, and if they will provide a certificate of compliance for any electrical work.
Make sure you have a clear description on the size and complexity of the job – you may require a consent from your local authority. That way you are likely to get a system that performs well, and you will have some comeback if things go wrong.
Water heating
Heating the water for your daily shower can cost a surprising amount of money. We’ve calculated the costs for a standard electric water-cylinder, natural gas (storage and instant), LPG (storage and instant), heat-pump water heaters and woodburner wetbacks.
We've assumed that a 10-minute shower running at 8 litres of water per minute uses 40 litres of hot water (the shower being half hot and half cold water). So the costs in our table are to heat 40 litres of water from 10°C to 60°C.
Guide to the table
Electricity and natural gas costs are from PowerSwitch. Other costs are from pricing data collected during February 2011. GST is included.
Water-heating options
A woodburner wetback is the cheapest option. Our figures are for bought firewood – but free firewood is … well … free. A heat-pump water heater is the next cheapest option.
Electricity, natural gas and LPG are the most common options for water heating and the costs are close. Natural gas is slightly cheaper – apart from that, your best option depends on the cost of the various alternatives in your area.
Instant natural gas and instant LPG water-heating are both slightly cheaper than the storage versions because they don't have heat losses from the cylinder.
Solar water-heating
We haven't included solar because every installation is different and we don't have enough reliable data to make a call on running costs. But our best guess (depending on your location) is that running costs for solar water heating will be similar to heat-pump water heaters.
Our advice
- The two cheapest and also environmentally sound home-heating options are firewood in a modern woodburner and wood pellets in a pellet burner.
- Electric heaters of some kind are the best overall choice for people who rent. Heat pumps are the cheapest-to-run way of electrically heating the whole house.
- Reticulated natural gas is still a good option for those who have access to it - but if you take the connection charges into consideration it's not cheap any more. LPG is more expensive than reticulated gas.
- The capital cost may make some heating options uneconomic, depending on your circumstances. (see below).
Capital costs
There's often a trade-off between running costs and the capital cost of the heating system. It's rather like the eco-friendly and economical car, which costs more to buy than the thirstier model.
Fifty dollars or so will get you an oil-column heater that costs you over 20 cents per kWh to run. Spend between $2000 and $3000 on a gas heater or a wood burner and the running costs will be about 10 cents per kWh. But spend $10,000 or so on a central-heating plant, and the running costs will drop only a cent or two - although the capital cost of the central-heating plant could well increase the marketability (and value) of your house.
Useful links
For more details on heating options, and tests of various types of heaters, see our other reports: